Gujarat HC Allowed IGST Refund as Omission of Rule 96(10) Applies to Pending Proceedings

Rohan Dyes and Intermediates Ltd. Vs Union of India (Gujarat High Court)

The case involves writ petitions filed by the petitioners seeking to quash and set aside impugned orders issued by the respondent authority, including orders dated 10.10.2024 and 24.03.2025. The petitioners submitted that the issue raised in the present petitions was already covered by a prior decision of the Court dated 20.11.2025 in Special Civil Application No.3081 of 2025 and related matters. Since identical issues were involved, the Court disposed of all petitions through a common order, with Special Civil Application No.8472 of 2025 treated as the lead matter.

The petitioner, a member of the Gujarat Dyestuff Manufacturers’ Association, faced proceedings initiated on the basis of intelligence received from the Deputy Commissioner, Customs, Mundra. It was alleged that the petitioner had wrongly availed refund of Integrated Goods and Services Tax (IGST) in violation of Rule 96(10) of the Central Goods and Services Tax Rules, 2017. Summons were issued, followed by a show-cause notice dated 24.08.2023. The petitioner contended that the notice was issued without considering its reply.

The petitioner had earlier challenged the constitutional validity of Rule 96(10) by filing a writ petition, which was disposed of by judgment dated 13.06.2025. Subsequently, the Court, in its judgment dated 20.11.2025 in Special Civil Application No.3081 of 2025 and allied matters, addressed the implications of Notification No.20/2024 dated 08.10.2024, which omitted Rule 96(10) of the CGST Rules.

In that earlier decision, the Court examined whether the omission of Rule 96(10) would apply retrospectively, prospectively, or to pending proceedings. It held that although the omission was prospective, it would also apply to all pending proceedings where final adjudication had not taken place. The Court clarified that petitions challenging show-cause notices and orders invoking Rule 96(10) constituted pending proceedings if they had not attained finality as of the date of the notification.

The Court further held that due to the omission of Rule 96(10) without any saving clause, the provision would no longer apply to pending cases. Consequently, proceedings initiated under the omitted rule could not be continued, and petitioners would be entitled to maintain their claims for IGST refund on exports.

The earlier judgment also relied on a decision of the Bombay High Court, which addressed the effect of repeal or omission of statutory provisions without a saving clause. It was noted that, under common law principles, repeal of a provision without a saving clause results in the provision being treated as if it never existed, except in respect of “transactions past and closed.” This means that pending proceedings or cases not yet finalized would not survive such repeal and would lapse.

The Bombay High Court decision elaborated that repeal without a saving clause destroys inchoate rights and pending causes of action unless they have reached finality. It emphasized that proceedings not concluded before repeal cannot continue, and courts must apply the law as it exists at the time of decision.

Applying these principles, the Gujarat High Court held that the omission of Rule 96(10) by Notification No.20/2024 would apply to all pending proceedings, including those before adjudicating authorities, appellate authorities, or courts. It also clarified that even orders passed prior to 08.10.2024 would not be considered “transactions past and closed” if they were still under challenge or appeal.

The Court also noted that the petitioners had no effective alternative remedy of appeal because the Appellate Tribunal had not yet been constituted. Therefore, the impugned orders could not be treated as final, and the petitioners were justified in approaching the Court through writ petitions.

In light of the binding precedent and the admitted position that the issue was covered by earlier decisions, the Court allowed the writ petitions. It quashed and set aside the impugned orders and held that the petitioners were entitled to claim refunds of IGST paid on export of goods. It further directed that all pending refund applications be processed. In cases where refund claims had been rejected, such claims were to be restored and reconsidered in accordance with law within 12 weeks from receipt of the order.

Additionally, a connected civil application was disposed of as not pressed.

In conclusion, the Court allowed the writ petitions, set aside the impugned actions of the authorities, and granted relief to the petitioners by enabling them to pursue their refund claims.

FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT

1. When the matters are called out, learned advocate appearing for the petitioners has submitted that the issue raised in the present writ petitions is squarely covered by the decision of this Court dated 20.11.2025 passed in Special Civil Application No.3081 of 2025 and allied matters.

2. Since the similar issue is involved, both the writ petitions are decided by this common order. The lead matter is Special Civil Application No.8472 of 2025.

3. By these writ petitions, the petitioners have prayed for quashing and setting aside the impugned order dated 10.10.2024 issued by the respondent No.2.

BRIEF FACTS:

4. The petitioner is a member of Gujarat Dyestuff Manufacturers’ Association. It is the case of the petitioner that on specific intelligence received vide letter dated 20.03.2023 from Deputy Commissioner, Customs Mundra, it was alleged that the petitioner has availed refund of Integrated Goods and Services Tax (IGST) violating provisions of Rule 96(10) of the Central Goods and Service Tax Rules, 2017 (for short “CGST Rules”). Thereafter, the proceedings were initiated and summons were issued to the petitioner. The petitioner has been issued show-cause notice dated 24.08.2023, without considering reply.

5. It appears that the petitioners had challenged the constitutional validity of Rule 96(10) of the CGST Rules by filing the writ petition being Special Civil Application No.13581 of 2023, which has been disposed of vide judgement and order dated 13.06.2025. Thereafter, this Court in the decision dated 20.11.2025 rendered in Special Civil Application No.3081 of 2025 and allied matters, by considering the judgement and order dated 13.06.2025 passed in Special Civil Application No.22519 of 2019 has disposed of the matters by considering the judgement of Bombay High Court in the case of Hikal Limited and Ors. Vs. Union of India and Ors., 2025 (9) TMI 806.

6. It is undisputed and very fairly admitted by learned advocate Ms.Sancheti that the issue raised in the present writ petitions is squarely covered by the decision of this Court.

7. In an identical issue, vide judgement and dated 20.11.2025 passed in Special Civil Application No.3081 of 2025 and allied matters this Court has held thus:

“5. It is not in dispute that the Coordinate Bench of this Court, in a group of matters being Special Civil Application No.22519 of 2019, vide judgment dated 13th June, 2025, has dealt with the issue with regard to Notification No.20/2024 dated 8th October, 2025, repealing Rule 96(10) of the Rules without any saving clause, and has held as under:

“203. In view of above conspectus of law, it appears that the recommendations of the GST Council to omit Rule 96(10) prospectively would apply to all the pending proceedings and cases. However, the contention on behalf of the Revenue that the petitioners have filed these petitions challenging the validity of Rule 96(10) cannot be said to be pending proceedings is without any basis because the petitioners have also challenged the show cause notices as well as orders-in-original passed by the respondents by invoking Rule 96(10) for rejecting the refund claims of the petitioners and therefore, it can be said that these petitions are nothing but pending proceedings before the Court which has not achieved finality when the Notification No.20/2024 came into force with effect from 8th October, 2024.

204. By Notification No.20/2024 Rules, 2024 have been notified and as per Rule 10 of the said Rules, Rule 96(10) of the CGST Rules has been omitted with prospective effect. This would give rise to three situations, firstly, whether the same would be applicable retrospectively, or secondly, prospectively or thirdly, same would be applicable prospectively but also to “pending proceedings”. As discussed here-in-above, Rule 10 of Rules, 2024 is applicable prospectively and the same also would be applicable to pending proceedings.

205. Therefore, we are of the opinion that Notification No.20/2024 dated 8th October, 2024 would be applicable to all the pending proceedings/ cases meaning thereby that Rule 96(10) would stand omitted prospectively but applicable to pending proceedings/cases where final adjudication has not taken place.

206. Therefore, in view of foregoing reasons, the omission of Rule 96(10) would apply to all the proceedings/cases/petitions which are pending for adjudication either before this Court or before the respondent adjudicating authority and no further proceedings are required to be carried forward and petitioners would be entitled to maintain refund claims of IGST paid on export of goods.

207. In view of above findings, as Rule 96(10) would not be applicable to the pending proceedings, in view of omission of Rule 96(10) by Notification No.20/2024 with effect from 8th October, 2024, the question of challenge to the vires and validity of rule 96(10) is not required to be considered at this stage.

208. The petitions therefore succeed in view of applicability of Notification No.20/2024 whereby Rule 96(10) is omitted and the said Notification would be applicable to all the pending proceedings/ cases as on 8th October, 2024. The impugned show cause notices and the orders-in-original are therefore, quashed and set aside. The petitioners are therefore, entitled to maintain refund claims for IGST paid for the export of goods as per Rule 96 of the CGST Rules, 2017 in accordance with law.”

6. We may, at this stage, refer to the decision of the Bombay High Court in the case of Hikal Limited & Ors. (supra), wherein the Bombay High Court, while considering the Notification dated 8^thOctober, 2024 and the provisions of Rules 89(4B) and 96(10) of the Rules, and the analogous issue, has held thus:

“59. From the above, it is indisputable that the impugned rules stand deleted. The only dispute revolves around the scope of such omission or repeal. The Petitioners contend that any savings clause did not back such omission or repeal, and therefore, the common law principle regarding repeals obliterating the repealed provision from the statute book or rule book would apply. The Respondents admit the omission or repeal but contend that the common law rule would not apply because pending proceedings have been expressly saved.

60. Justice G P Singh, in his “Principles of Statutory Interpretation”, 15th edition, has explained that under the common law, the consequences of the repeal of a statute are very drastic. Except as to transactions past and closed, a statute after its repeal is treated as completely obliterated as if it had never been enacted. The effect is to destroy all inchoate rights and all causes of action that may have arisen under the repealed statute. Therefore, leaving aside the cases where proceedings were commenced, prosecuted and brought to a finality before the repeal, no proceeding under the repealed statute can be commenced or continued after the repeal (See Keshvan Vs State of Bombay31, State of Punjab Vs Mohar Singh32, Qudrat Ullah Vs Municipal Board, Bareilly33, State of Rajasthan Vs Mangilal Pindwal34 and Mohan Raj Vs Dimbeswari Saikia & Anr35).

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68. In Keshavan Menon Vs State of Bombay (supra), the expression and concept of “transactions past and closed” was explained in the context of repeal of an Act in paragraph Nos. 11, 12 and 14, which are transcribed below for the convenience of reference:

“11. This statement of law by Craies was referred to with Approval and adopted by the F. C. in J. K. Gas, Plant Manufacturing Co., (Rampur), Ltd. v. Emperor, (1947) F.C.R. 141 at p. 166: (A. I. R. (34) 1947 F.C. 38:48 Cr. L. J. 886). As to the effect of the repeal of an Act, the following passage from Craies’ book seems to sum up the legal position as it obtained in England before the enactment of the Interpretation Act of 1889 :

“When an Act of Parliament is repealed,” said Lord Tenterden in Surtees v. Ellison, (1829) 9 B. and C. 750 at p. 752: (7 L. J. K. B. 335), “it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule.” Tindal C. J. states the exception more widely. He says (in Kay v. Goodwin, (1830) 6 Bing. 576: (8 L.J.C.P. 212): “The effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law.” (p. 350)”

12. Again, Crawford in his book on “Statutory Construction “dealing with the general effect of the repeal of an Act states the law in America to be as follows: “A repeal will generally, therefore, divest all inchoate rights which have arisen under the repealed statute, and destroy all accrued causes of action based thereon. As a result, such a repeal, without a saving clause, will destroy any proceeding, whether not yet begun, or whether pending at the time of the enactment of the repealing Act, and not already prosecuted to a final judgment so as to create a vested right” (pp. 599-600).

14. The author then proceeds to quote the following passage from Wall v. Chesapeake and Ohio Ry. Co., (125 Ν. Ε. 20) :. Ε. 20) :. 20) :

“It is well settled that if a Statute giving a special remedy is repealed without a saving clause in favour of pending suits all suits must stop where the repeal finds them. If final relief has not been granted before the repeal went into effect, it cannot be after. If a case is appealed, and pending the appeal the law is changed, the appellate Ct. must dispose of the case under the law in force when its decision was rendered. The effect of the repeal is to obliterate the Statute repealed as completely as if it had never been passed, and it must be considered as a law which never existed, except for the purposes of those actions or suits which were commenced, prosecuted and concluded while it was an existing law. Pending judicial proceedings based upon a Statute cannot proceed after its repeal. This rule holds true until the proceedings have reached a final judgment in the Ct. of last resort, for that Ct., when it comes to announce its decision, conforms it to the law then existing, and may, therefore, reverse a judgment which was correct when pronounced in the subordinate tribunal from whence the appeal was taken, if it appears that pending the appeal a Statute which was necessary to support the judgment of the lower Ct. has been withdrawn by an absolute repeal.” (p. 601).

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RELIEFS

112. Upon comprehensive review of all the above aspects, we hold that, following the omission or repeal of the impugned Rules, i.e., Rules 89(4B) and 96(10) of the CGST Rules via Notification dated 08 October 2024, and in the absence of any saving clauses or the benefit of Section 6 of the General Clauses Act, all pending proceedings—such as undisposed show cause notices, orders disposing of show cause notices issued after 08 October 2024, or even orders made before 08 October 2024 but not yet finalised due to appeals before the Appellate Authorities or challenges before this Court, thus not constituting “transactions past and closed”—are not preserved and will stand lapsed.”

7. A combined reading of the aforesaid judgments, which have dealt with Notification No.20/24 dated 8th October, 2024, repealing the provisions of Rules 89(4B) and Rule 96(10), of the Rules exposit that the repealing of the provisions of the Rules without a saving clause renders the provisions redundant, right from the inception. The omission of the Rules would apply to all the proceedings/ cases/ petitions which are pending for adjudication either before this Court or before the respondent-adjudicating authority, or even to orders made before 8th October, 2024 but not yet finalized due to appeals before the Appellate Authorities or challenges before this Court, since the same will not constitute “transactions past and closed”, and do not get preserved and will stand lapsed. We may also further clarify that the remedy of filing an appeal before the Appellate Tribunal is not available to the petitioners, since the Tribunal is not yet constituted, and hence they are constrained to file the writ petitions. Thus, since the petitioners have no remedy of filing an appeal because of the non-constitution of the Tribunal, it cannot be said that the OIAs have become final, and hence such orders will not constitute “transactions past and closed”. The orders which are challenged in the writ petitions will stand lapsed in view of the aforementioned decisions.

7.1. Thus, all writ petitions are allowed; the impugned action of the respondents is quashed and set aside. The petitioners are entitled to refund. All the pending applications for refund shall be processed. In case the applications are rejected and the refund is refused, the same shall stand restored and shall be further processed. Needful shall be done within a period of 12 (twelve) weeks from the date of receipt of the writ of the present order. Rule is made absolute. No order as to costs.

8. In view of above, learned advocate for the applicant does not press Civil Application (For Amendment) No.2 of 2025 in R/Special Civil Application No.10569 of 2025. Hence, the present Civil Application stands disposed of as not pressed.”

9. In light of the foregoing observations and statement made by the learned advocates appearing for the respective parties, the present writ petitions succeed. The impugned orders dated 10.10.2025 and 24.03.2025 passed by the respondent No.2 respectively are hereby quashed and set aside. Rule made absolute.

Registry to place a copy of this order in the connected matter(s).